Trusted News for Credit Union Leaders

Credit Union Times

FEBRUARY 6, 2019 | VOL. 30 | NO. 4 | CUTIMES.COM

new war for deposits is creating a less than positive outlook this year among credit union and bank executives.

Less than half of senior credit union executives are optimistic and only 50% of bank executives are of the same mindset, according to research released in January by Ron Shevlin, director of research for consulting firm Cornerstone Advisors in Scottsdale, Ariz. The research report was based on 300 interviews with senior credit union and bank executives during the fourth quarter of last year. Moreover, among credit union senior executives, their optimism has plunged by nearly 30% from

2018.

What is contributing to this negative outlook, and what is also alarming and worrisome among financial institution executives, is that the competition for deposits has become increasingly fierce and unrelenting. More than half of credit union executives and 50% of bank executives said their top concern for 2019 is to grow deposits. Last year and in Y17

PETER STROZNIAK

pstrozniak@cutimes.com

The New
War for
Deposits

GROWTH STRATEGIES PAYMENT SECURITY

redit unions offer
access to some of
the most sophisti-
cated ATMs in the
world, but like other financial
institutions, they are still bat-
tling a nagging problem: Skim-
ming. Among credit unions, it’s
the third most prominent type
of fraud, according to a recent
survey by CO-OP Financial Ser-
vices, and many don’t expect
those skimming attempts to let
up anytime soon. Here’s what
two industry pros said credit
unions can expect in 2019 and
what they can do now to help
stem the skimming.

What to Expect

1. More sophisticated skimmers.
The general recipe for skimming
devices still involves two main
ingredients: A mag-stripe reader
and a camera. But those ingre-
dients are getting
smaller, easier to
install and hard-
er to detect, said
Steve McCarthy,
general manager
at the Cincinnati,
Ohio-based Con-
vergint Technolo-
gies, which provides financial se-
curity services.

Criminals have concocted so-called deep-insertion skimmers that communicate

TINA OREM

torem@cutimes.com

ATM Fraud: How to Fight Back

FOCUSREPORT:

CYBERSECURITY

When a credit union suffers a data breach, it ends up paying more than a dollar amount. In this Focus Report, experts provide an analysis of the true costs of a breach – both monetary and reputational. Y6

Must Reads

INVESTMENTS

‘Pensionize’ 401(k)s and IRAs In a world of defined contributions, American workers have three challenges – inadequate savings, leakage (or loans/early withdrawals) tied to their retirement accounts and the need for retirement income. Plus, just half of all DC plans offer a way for investors to transform balances into periodic retirement income, with only one in five offering guaranteed lifetime payouts.

This situation prompted Steve Vernon of the Stanford Center on Longevity, Wade Pfau of The American College of Financial Services and researcher Joe Tomlinson to explore and devise solutions to “pensionize” retirement plans. Their work, first published last year and then updated this year, finds that only one-third of workers contact financial advisors, and most lack the necessary skills to convert savings into retirement income and typically have short planning horizons.

But research from the Stanford Center on Longevity (SCL) and Society of Actuaries (SOA) has found a “straightforward retirement strategy,” according to the three authors. “Choosing a specific solution that will help workers generate retirement income requires them to make informed tradeoffs between potentially competing goals,” they explained, such as “maximizing lifetime income; providing access to savings (liquidity); planning for bequests;

FINTECH

Insuring Cyber Risks

The top technology concern of
financial professionals is cyber-
security, according to polls don
by the Investment Adviser Asso-
ciation and Investment Advisor
agazine.

Addressing this issue are cyber insurers, who work in a market that could grow to $17.6 billion in 2023 from about $4.5 billion today, Orbis Research said. Driv this growth are factors like data breaches and the growing use of cloud-based services.

To look at the risks facing cyber insurers today and the limitations of this coverage for financial and other firms, r porters spoke at length with Sid Yenamandra, the co-founder and CEO of cybersecurity firm Entreda.

Yenamandra, who is well versed in the potential causes of a major cybersecurity-related disruption, addressed he over-ll threat posed to the financial industry by cyberattacks in an earlier interview. In a third (and inal) interview, he explains what ctions financial firms are and should be taking to imp ove their cybersecurity.

What level of cyber risks do large insurance companies have?

Yenamandra: This is a question hat goes to the core of what we do as an organization. At Entrada, we work with independent bro k r-dealers and insurance firms to help them manage Y15